Standard & Poor’s revised its outlook to stable from negative on the Southern Illinois University Board of Trustees’ A-plus due to improved operations.

The review came ahead of the school’s $25.8 million sale of housing and auxiliary facilities system revenue bonds slated for later this month.

“The return to a stable outlook reflects our view that although the state continues to delay disbursements, SIU has demonstrated the ability to successfully manage its operations, strengthen its cash flows, and make timely debt service and vendor payments during the past two years,” wrote analyst Jonathan Volkmann.

The agency had revised its outlook to negative on all of the rated debt issued by Illinois’ public universities in January 2010 because of the strain from ongoing delays in state aid payments.

The rating is supported by positive operating performance for the last four years, stable demand, low debt burden, and comprehensive course offerings.

Low financial resources for its rating category, a small albeit growing endowment, and a reliance on state aid amid ongoing delays pose credit challenges. State aid represented about 39.5% of fiscal 2011 operating revenues.

Moody’s Investors Service recently affirmed the school’s A2 rating and negative outlook. The action affects $324 million of rated debt.

The school is the second-largest public university in the state system with more than 28,000 students.

“The negative outlook reflects the unstable financial situation at the state level, and the fact that a severe decline in appropriations would materially impact SIU’s operations,” Moody’s wrote.

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